Organizational Behaviour Analysis and Recommendations for Starbucks

This report analyzes the organizational behavior of Starbucks, examining various aspects including employee satisfaction, workplace discrimination, and crisis management. It begins with an introduction and company background, highlighting Starbucks' mission and values. The analysis delves into challenges such as employee dissatisfaction due to low wages and lack of incentives, as well as instances of workplace discrimination. The report applies theories like Maslow's Hierarchy of Needs and Herzberg's Two-Factor Theory to explain these issues. It also explores organizational policies, workplace interactions, and a specific public relations crisis. The recommendations section suggests improvements, including increased wages, enhanced communication, improved organizational culture, and anti-discrimination policies. The report emphasizes the importance of employee motivation and satisfaction for the overall effectiveness of the organization. The conclusion summarizes the key findings and recommendations.

Running head: ORGANIZATIONAL BEHAVIOUR
ORGANIZATIONAL BEHAVIOUR
Student’s name
University Name
Author note

1
ORGANIZATIONAL BEHAVIOUR
Introduction
The organizational behavior implies the study of individual behavior in the context of the
organization. The study aims to research in the individual, and the organizational teams in the
chosen organization Starbucks. It analyzes the behavior of the organization, it analyzes other
information regarding the activities of the organization and explore on the ways to achieve the
goals and policies of the organization. The theories applied by the organization to resolve the
behavioral issues in the organization. It analyzes on the organizational crisis and the ways
handled by the company. It identifies the other aspects of the organization and the theories
applied. It provides recommendations to improve the effectiveness of the organization.
Company background
Starbucks is a coffee company that was established in the year 1987, the CEO of the
company is Howard Schultz. The original business plan of Starbucks had proposed to have
around 125 stores in total of five years to the investors. The company is highly growing at the
rate of 80% with more than 150 stores. The company today is one of the leading retailer, and
known for its specialty coffee in America. The mission of the company is to establish its
business as premier finest specialty coffee in the world (Starbucks, 2019). Starbucks maintain its
policies and principles while achieving its goal to expand its business globally. The company is
highly value driven and firmly follows its predetermined goals and principles. The company
highly values the employees of the organization and invests greatly upon them. The founder of
Starbucks wanted to create a place which establishes and provides comprehensive environment
and self esteem in the workplace of the organization. The company also believes in the value of

2
ORGANIZATIONAL BEHAVIOUR
its parties, this has resulted in satisfactory customer service. The customers’ satisfaction enables
the company to influence its financial returns. Starbucks has been voted to be among the top ten
places to work (Starbucks, 2019).
Analysis
Due to the dynamic business environment Starbucks face various challenges in its
business activities. The needs and requirements of the employees in the organization are
challenges with the change in the environment. Due to the multiculturalism and the changing
social economic structure, the motivating factors of the employees are changing. The
management is facing challenges to enhance the performance of the organization. Starbucks has
been facing behavioral issues (Mukerjee, 2014). Employees’ dissatisfaction and discrimination in
the workplace has been reported lately.
It has been researched that the company has been provides low monetary and non
monetary incentives to its employees. The wage rate of the employees has been significantly low
to the expectations of the company. The company tries to cut down the operational cost and
increasing its profitability by reducing the benefits to the employees of the Starbucks. This is
highly resulted in the dissatisfaction of the employees. The employee dissatisfaction has been
triggered due to low salary. According to Maslow’s Need Hierarchy theory, the psychological
needs must be satisfied. According to the Herzberg’s two factor theory, absence of hygiene
factors such as working conditions, job security, and salary may lead to dissatisfaction of the
employees. This often leads to low productivity and performance (Hyken, 2018).
It has also been reported that the company is facing discrimination at the workplace
which has turned out to be a major issue for the company. The presence of authoritarian culture

3
ORGANIZATIONAL BEHAVIOUR
in the organization and the lack of ability to keep the employees motivated have resulted in
employee grievance. There have been incidents of discrimination in the workplace. The women
employees of the organization and the employees with more than 40 years of age are provided
with less salary and deprived of recognition. This has affected the organization’s culture and
resulted in dissatisfaction (Pradhan, et al., 2016).. According to Herzberg’s two factors
Motivation theory, the absence of factors like job satisfaction, recognition and achievement,
growth opportunities can lead to employee dissatisfaction. These are areas which the company is
doing poorly.
The area in which the company is doing well is its quality production and enhanced
customer satisfaction. The coffee offered by the company has gained much popularity. The
company believes in sourcing finest coffee beans. There are highly engaged with customer
satisfaction. They maintain a sense of belonging for its customers in the stores.
Workplace interaction
Starbucks provides a working environment that encourages positive interaction with the
employees and the customers. They actively create an environment which promotes the
employees abilities, strengths, differences and encourages diversity in the workplace.
Multiculturalism is encouraged which enhances interaction in the workplace (How We Treat One
Another, 2019).
Organizational policies
The mission of Starbucks is to inspire the human spirit and establish premier quality
finest coffee in the world while maintaining its principles and policies. The policies of Starbucks
highly demonstrate their commitment to a responsible business. They maintain their global

4
ORGANIZATIONAL BEHAVIOUR
ethical standards of business and operate on the guidelines preset by them. They operate in
consistency with their policies and mission. They adhere to the basic human rights of the
individual (Policies, 2019).
Organizational crisis
The organization has been a facing a public relation crisis. The company faced a threat to
its reputation with an employee of the store ended up misbehaving with its customers with a
different race. This situation has threatened the company reputation as they have been racially
discriminating the customers. To acknowledge the problem, the company announced that they
will be conducting racial bias training, they issues an apology to the public (Hyken, 2018). The
company had been committed to resolve the crisis; they acted with urgency and resolved the
issue.
Other aspects of organization
In regards to the Herzberg’s two factor theory, Starbucks provides emphasis on the
factors which are associated with the work of employee. They provide promotional
opportunities, provide scope for personal and professional growth, and provide recognition and
monetary and non monetary incentives. It delegates adequate responsibility which the employees
find rewarding (Gargiulo, 2014).
Recommendations
As discussed above, the major issues faced by Starbucks are employee dissatisfaction and
discrimination issues in the workplace. It provides necessary evidence that the organization has

5
ORGANIZATIONAL BEHAVIOUR
failed to generate a positive working environment for its employees. The leadership styles used
by the managers are authoritative which have failed to motivate the employees in the
organization. This has lead to decrease in the quality of performance of the workers. This section
provides recommendations that can improve the effectiveness of the company. The management
of the organization has to be focused on, according to the theories applied; to increase the
customer satisfaction the company must provide the psychological needs of an individual to
motivate the employees (Pradhan, et al., 2016). They must be provided with sufficient basic
salary, which will satisfy the purpose of the workers. Moreover, they must be provided with
monetary and well as non monetary incentives, this will enable the company o gain full
satisfaction of the employees and enhanced productivity.
The wage rate of the employees must be increased; this will enable the company to have
parity with the present economic status of the concerned country. the communication process and
the interactions in the workplace needs to be enhanced, two way communication needs to be
encouraged, so that employees get present their opinion and get necessary feedback on them.
This is making the employees of the organization feel recognized. Starbucks needs to enhance its
organization culture that encourages the views and ideas of the employees and support
innovation with ample opportunities to grow and expand (Mukerjee, 2014).
In order to improve the employee satisfaction, the company must improve the employee
morale and discrimination in the workplace needs to be eliminated. In order to enhance the
effectiveness of the organization, they need to implement a culture in the organization that is
discrimination free, make policies for anti discrimination, and provide training opportunities for
racial biasness. These must be implemented properly in the organization.

6
ORGANIZATIONAL BEHAVIOUR
The management of the company must be properly trained to enhance the communication
with the workers. These are highly needed in the organization to influence positive
communication in the workplace. The executives and the managers of the organization must be
responsible for motivating the employees of the organization with several monetary and non
monetary incentives (Gargiulo, 2014). The responsibility and authority must be properly
distributed in the organization; the aim for delegating the responsibility is to enhance the
performance of the organization and employee satisfaction.
The employees of the organization must be provided with rewards and recognition
opportunity and must be implemented to encourage the workers and staffs to achieve excellence
in their performance. Recognizing the efforts of the employees will enable the organization to
enhance the employee motivation and also lead to higher productivity with efficient
performance. Further, the company, in order to retain the best employees, they must provide
incentives and provide opportunity for career growth and opportunity. It is recommended to the
company to bring necessary changes, in its principles and policies, including the product
development strategy. The management of the organization needs to focus on the management
structure and adapt a positive culture in the organization (Gargiulo, 2014).
Conclusion
The study has analyzed the organizational behavior of Starbucks. It has been researched
that the company is facing various issues due to dissatisfaction of the employees. The employees
of the organization are satisfied with the authoritative culture of the organization. The employees
of the organization are not motivated due to poor working environment. Further, the study has
recommended ways to enhance the effectiveness of the organization.

7
ORGANIZATIONAL BEHAVIOUR
References:
DuBois, C. L., Astakhova, M. N., & DuBois, D. A. (2013). Motivating behavior change to
support organizational environmental sustainability goals. Green organizations: Driving
change with IO psychology, 186-207.
Gargiulo, T. L. (2014). The strategic use of stories in organizational communication and
learning. Routledge.
How We Treat One Another. (2019). Retrieved from https://livingourvalues.starbucks.com/workplace
Hyken, S. (2018). Starbucks Gets An A In Crisis Management. Retrieved from
https://www.forbes.com/sites/shephyken/2018/05/10/starbucks-gets-an-a-in-crisis-management/
#615359987998
Mukerjee, K. (2014). Fostering employee engagement in organisations: a conceptual
framework. International Journal of Management Practice, 7(2), 160-176.
Policies. (2019). Retrieved from https://www.starbucks.com/responsibility/learn-more/policies
Pradhan, R. K., Jena, L. K., & Kumari, I. G. (2016). Effect of work–life balance on
organizational citizenship behaviour: Role of organizational commitment. Global
Business Review, 17(3_suppl), 15S-29S.
Starbucks Corporation, (2019). - Company Profile, Information, Business Description, History,
Background Information on Starbucks Corporation. Retrieved from
https://www.referenceforbusiness.com/history2/54/Starbucks-Corporation.html
Starbucks. (2019). Retrieved from http://www.starbucks.in/

8
ORGANIZATIONAL BEHAVIOUR
Wagner III, J. A., & Hollenbeck, J. R. (2014). Organizational behavior: Securing competitive
advantage. Routledge.